26 Mar 2012 07:00
26 March 2012
PURE WAFER PLC
("Pure Wafer" or "the Company")
Interim Results for 6 months ended 31 December 2011
Pure Wafer plc, the provider of high quality silicon wafer reclaim services for many of the world's leading semiconductor manufacturers as an integral part of their cost control programmes, today reports its interim results for the 6 months to 31 December 2011.
HIGHLIGHTS
Financial Highlights·; Revenue $17.9m (6 months to 31 December 2010: $13.8m)
·; EBITDA $2.8m (2010: $1.6m)
·; EBITDA pre stock option charge $2.9m (2010: $1.6m)
·; Gross margin 30.7% (2010: 28.3%)
·; Pre-tax loss $0.7m (2010: $3.0m)
·; Basic loss per share 0.2c (2010: loss per share 2.4c)
·; Net cash inflow from operating activities $3.0m (2010: $2.9m)
Operational Highlights
·; Continuing increase in volume sales, 31% up from comparative period
·; Further on-going cost reductions successfully implemented, cost per unit 4.5% down
·; Productivity at highest ever levels
·; Positive contribution to Group's results from solar division
Stephen Boyd, Chairman, Pure Wafer, commented,
"Pure Wafer has benefited from the continued growth of the semiconductor industry with an increase of 31% in our 300mm wafer reclaim volumes. This increase in volumes at stable selling prices together with our lowest ever cost of manufacture has enabled the group to produce results with significant increases in both revenues and EBITDA profitability. These results were also boosted by our first period of trading in the pv solar market which made an important contribution to our revenue and EBITDA".
ENQUIRIES
Pure Wafer plc (www.purewafer.com) | Tel. +44 (0) 1792 311 200 |
Peter Harrington, Chief Executive Richard Howells, Group Finance Director | |
WH Ireland Limited (www.wh-ireland.co.uk) | Tel. +44 (0) 117 945 3470 |
JN Wakefield / Marc Davies |
PURE WAFER PLC
("Pure Wafer" or "the Company")
Interim Results for 6 months ended 31 December 2011
Chairman's Statement
Introduction
We are delighted to announce the interim results for the period to 31st December 2011 which once again reflect the significant strides forward that the company continues to make. With revenues up by 30% compared to the comparative period and EBITDA up by 69% over the same period. These excellent results demonstrate that Pure Wafer continues to consolidate its standing in the semiconductor industry as one of the leading wafer reclaim companies in the world.
During the period Pure Wafer continued to see increased demand for its wafer reclaim services mainly from the US and Asian markets but also from a stable European sector with demand continuing at the higher levels enjoyed during the second half of our prior financial year.
With the newly formed solar business commencing in earnest during the period we are pleased to report that trading commenced positively with strong enquiry and order books. Despite the sudden announcement in October 2011 by the UK Government that the Government backed feed-in-tariff would be halved from 12 December 2011, trading has been in line with expectations and has made positive contributions to the Group results both in terms of revenue and EBITDA.
Financial performance
·; Revenue $17.9m (6 months to 31 December 2010: $13.8m)
·; EBITDA $2.8m (2010: $1.6m)
·; EBITDA pre stock option charge $2.9m (2010: $1.6m)
·; Gross margin 30.7% (2010: 28.3%)
·; Pre-tax loss $0.7m (2010: $3.0m)
·; Basic loss per share 0.2c (2010: loss per share 2.4c)
·; Net cash inflow from operating activities $3.0m (2010: $2.9m)
The board is encouraged by the actions of the management team during the period to reduce costs across all sectors of the business as well as maximising revenue during the trading period.
Operational
Wafer reclaim
During the period the company enjoyed an increase in 300mm wafer reclaim volume sales of 31% when compared to the comparative period to 31st December 2010, however, 200mm volumes decreased by 8% during the period, as a major customer completed its transition from 200mm to 300mm manufacturing. Increased market share from both Asia and the US enabled both manufacturing sites at Swansea and Prescott to raise production levels without any significant increases in labour and to run at record levels of productivity.
Pure Wafer's on-going cost reduction strategy has continued to be successful which together with the high levels of productivity has enabled the group to reduce costs per unit by 4.5% compared to the comparative period. Our operations are scaled to accommodate the increasing demand and together with our lower cost of manufacture are well placed to take advantage of this increasing activity.
Solar pv
Our first period of full trading proved to be both successful and frustrating due to the impact of the Government announcement on 31stOctober 2011 that it was reducing the level of feed in tariff on solar installations by 50% from 12th December 2011. The result of the announcement was to accelerate a long enquiry list and a healthy order book spread over the coming months into a customer frenzy situation where all enquiries and orders demanded that their installation was completed by 12th December. This large and sudden uptake resulted in a shortage of components required for installations which put pressure on, and ultimately restricted, the number of projects that could be completed within the six week period prior to the feed-in-tariff change date. During this short period, despite the difficulties the company completed a large proportion of our customer orders and ran at a high level of turnover for the six week period, demonstrating both the production and installation capability of the solar division.
Outlook
The semiconductor industry continues to look at growth in 2012, despite a short term slow down during Q4 2011 borne out of industry inventory corrections especially by memory chip manufacturers. However, notwithstanding the economic woes of Europe and the US, growth in the semiconductor industry is, in part, being fuelled by the increasing demand for hand held devices in the emerging economies of China, India, Russia and Brazil, which is encouraging new investment in 300mm silicon wafer manufacturing facilities announced by the major chip manufacturers, which will give further wafer reclaim opportunities.
Pure Wafer continues to gain volumes from industry growth and increased market share in the Asian and US regions, as we continue to demonstrate our technology advancement, keeping abreast with the requirements of our blue chip and world leading customer base.
Pure Wafer solar division has been buoyed by the successful appeal against the Government decision to reduce the feed-in-tariff rate, albeit this decision made in January 2012 once again presented only a small window of opportunity before the lower rate came into force on 2nd March 2012.
Subsequent to the period end with component material prices falling we have been able to offer our fully installed systems at prices which continue, at the lower level of feed-in-tariff rates, to show a substantial return on investment for our customers. As such, once again our order books are filling with many commercial businesses and property owners as well as homeowners taking up our offering.
We expect that Pure Wafer's solar division will continue to trade strongly and produce results in line with management expectations through the remainder of the financial year.
The Company further confirms that it is meeting all obligations under the financial restructuring agreement, details of which are set out in the annual report and accounts.
Stephen Boyd
Chairman
26 March 2012
PURE WAFER PLC
Interim Results for 6 months ended 31 December 2011
Consolidated Income Statement
6 months ended31 December 2011 | 6 months ended31 December 2010 | Year ended30 June 2011 | ||
Notes | $'000 | $'000 | $'000 | |
2 | Revenue | 17,931 | 13,768 | 29,719 |
Cost of sales | (12,430) | (9,867) | (21,414) | |
Gross profit | 5,501 | 3,901 | 8,305 | |
Depreciation and amortisation | (2,788) | (3,914) | (7,030) | |
Share options | (64) | - | (113) | |
Other administrative expenses | (2,645) | (2,253) | (4,981) | |
Total administrative expenses | (5,497) | (6,167) | (12,124) | |
2 | Operating profit/(loss) | 4 | (2,266) | (3,819) |
Finance costs | (604) | (595) | (1,206) | |
3 | Other losses and gains | (73) | (176) | (76) |
Loss on ordinary activities before taxation | (673) | (3,037) | (5,101) | |
Tax on loss on ordinary activities | 384 | - | 511 | |
Loss for the period | (289) | (3,037) | (4,590) | |
4 | Loss per share | |||
Basic | (0.2)c | (2.4)c | (3.6)c | |
Diluted | (0.2)c | (2.4)c | (3.6)c |
The results stated above arose entirely from continuing activities.
Consolidated Statement of Comprehensive Income
6 months ended 31 December 2011 | 6 months ended31 December 2010 | Year ended 30 June 2011 | ||
$'000 | $'000 | $'000 | ||
Loss for the period | (289) | (3,037) | (4,590) | |
Other comprehensive income: | ||||
Net gain on translation of subsidiaries with foreign functional currency |
- |
540 |
- | |
Total comprehensive income for the period |
(289) |
(2,497) |
(4,590) | |
PURE WAFER PLC
Interim Results for 6 months ended 31 December 2011
Consolidated Balance Sheet
Notes | 31 December 2011 | 31 December 2010 | 30 June 2011 | |
$'000 | $'000 | $'000 | ||
Non-current assets | ||||
Property, plant and equipment | 28,078 | 34,154 | 30,970 | |
Intangible assets | 1,134 | 968 | 1,193 | |
Goodwill | 6,630 | 6,630 | 6,630 | |
35,842 | 41,752 | 38,793 | ||
Current assets | ||||
Inventory | 2,171 | 2,015 | 2,194 | |
Trade and other receivables | 7,485 | 5,352 | 7,248 | |
Cash and cash equivalents | 1,454 | 949 | 2,032 | |
11,110 | 8,316 | 11,474 | ||
Total assets | 46,952 | 50,068 | 50,267 | |
Current liabilities | ||||
Trade and other payables | (5,726) | (4,146) | (5,178) | |
Interest bearing loans and borrowings |
(6,366) |
(4,420) |
(8,214) | |
Derivative financial instruments | (1) | (18) | (5) | |
(12,093) | (8,584) | (13,397) | ||
Non-current liabilities | ||||
Long-term borrowings | (10,145) | (13,834) | (11,651) | |
Deferred income | (2,050) | (2,785) | (2,334) | |
(12,195) | (16,619) | (13,985) | ||
Total liabilities | (24,288) | (25,203) | (27,382) | |
Net assets | 22,664 | 24,865 | 22,885 | |
Equity | ||||
Share capital | 4,321 | 4,317 | 4,317 | |
Share premium | 24,857 | 24,857 | 24,857 | |
Merger reserve | 58,826 | 58,826 | 58,826 | |
Retained earnings | (62,515) | (60,850) | (62,290) | |
Exchange translation reserve | (2,825) | (2,285) | (2,825) | |
6 | Total equity attributable to equity holders of the Company | 22,664 | 24,865 | 22,885 |
PURE WAFER PLC
Interim Results for 6 months ended 31 December 2011
Consolidated Cash Flow Statement
Notes | 6 months ended 31 December 2011 | 6 months ended31 December 2010 | Year ended 30 June 2011 | |
$'000 | $'000 | $'000 | ||
5 | Cash flows from operating activities | 3,039 | 2,941 | 1,374 |
Cash flows from taxation | ||||
Tax paid | (1) | - | - | |
Research and development tax credits | - | - | 1,989 | |
Net cash (outflow)/inflow from taxation | (1) | - | 1,989 | |
Cash flows from investing activities | ||||
Purchase of property, plant and equipment | (100) | (263) | (601) | |
Net cash outflow from investing activities | (100) | (263) | (601) | |
Cash flows from financing activities | ||||
Interest paid | (469) | (595) | (1,158) | |
Repayment of bank loans | (947) | - | (1,844) | |
Proceeds of share issue | 3 | - | - | |
Net cash outflow from financing activities | (1,413) | (595) | (3,002) | |
Increase/(decrease) in cash and cash equivalents | 1,525 | 2,083 | (240) |
PURE WAFER PLC
Interim Results for 6 months ended 31 December 2011
Notes to the Accounts
1. Basis of preparation
The information for the year ended 30 June 2011 does not constitute statutory accounts as defined by the Companies Act 2006. A copy of the statutory accounts for the year ended 30 June 2011 has been delivered to the Registrar of Companies, upon which an unqualified audit report was given.
The annual financial statements of Pure Wafer Plc are prepared in accordance with IFRS, IAS and IFRIC interpretations as adopted by the European Union (collectively "IFRS"). These interim results are prepared on the basis of the accounting policies which the company will use in preparation of the financial statements for the year ended 30 June 2012. There are no changes from the policies disclosed in the 2011 financial statements.
Going concern
The group's business activities, together with the factors likely to affect its future development, performance and position, are set out in the Chairman's Statement on page 2. The directors have considered the group's performance to date and reviewed the cashflow forecasts for the forthcoming period. The forecasts indicate that whilst cash will need to be tightly controlled, the directors believe the facilities that are in place will be sufficient for the business to continue trading for the foreseeable future. Accordingly, the directors have a reasonable expectation that the group and the company have adequate resources to continue in operational existence for the foreseeable future. For this reason, the interim financial statements continue to be prepared on a going concern basis.
2. Business and geographical segments
6 months ended31 December 2011 | 6 months ended31 December 2010 | Year ended30 June 2011 | |
Revenue | $'000 | $'000 | $'000 |
Wafers - UK - North America | 8,624 7,460 | 7,396 6,345 | 16,016 13,324 |
Solar | 1,847 | 27 | 379 |
17,931 | 13,768 | 29,719 |
6 months ended31 December 2011 | 6 months ended31 December 2010 | Year ended30 June 2011 | |
Operating profit/(loss) | $'000 | $'000 | $'000 |
Wafers - UK - North America | (337) 569 | (2,019) 66 | (3,179) 157 |
Solar Unallocated corporate expenses | 183 (411) | 27 (340) | 49 (846) |
4 | (2,266) | (3,819) |
Notes to the Accounts (continued)
3. Reconciliation of other gains and losses
6 months ended31 December 2011 | 6 months ended31 December 2010 | Year ended30 June 2011 | |
$'000 | $'000 | $'000 | |
Foreign exchange loss | (77) | (139) | (126) |
Gain/(Loss) on derivatives | 4 | (37) | 50 |
Other losses and gains | (73) | (176) | (76) |
4. Earnings per share
The basic earnings per share is calculated by dividing profit attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year. For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares.
Earnings per share have been calculated as follows:
6 months ended 31 December 2011 | 6 months ended31 December 2010 | Year ended 30 June 2011 | |
'000 | '000 | '000 | |
Weighted average number of ordinary shares: | |||
- In issue during the period | 126,403 | 126,303 | 126,303 |
- Fully diluted | 180,631 | 175,081 | 180,631 |
Unadjusted earnings | $(289) | $(3,037) | $(4,590) |
Earnings per share | 6 months ended 31 December 2011 | 6 months ended31 December 2010 | Year ended 30 June 2011 |
Basic | (0.2)c | (2.4)c | (3.6)c |
Basic diluted | (0.2)c | (2.4)c | (3.6)c |
Notes to the Accounts (continued)
5. Cash flows from operating activities
6 months ended 31 December 2011 | 6 months ended31 December 2010 | Year ended 30 June 2011 | |
$'000 | $'000 | $'000 | |
Loss for the period | (289) | (3,037) | (4,590) |
Taxation | (384) | - | (511) |
Finance expense | 604 | 595 | 1,206 |
Share options charge | 64 | - | 113 |
Other non-cash gains and losses | (4) | 540 | (50) |
Depreciation and amortisation | 2,788 | 3,914 | 7,586 |
Operating cash flows before movements in working capital |
2,779 |
2,012 |
3,754 |
Decrease/(Increase) in receivables | 149 | 1,530 | (1,842) |
Increase/(Decrease) in payables | 88 | (506) | (264) |
Decrease/(Increase) in inventories | 23 | (95) | (274) |
Cash flows from operating activities | 3,039 | 2,941 | 1,374 |
6. Changes in equity
Share capital | Share premium | Merger reserve | Exchange translation | Retained earnings | Total | |
$'000 | $'000 | $'000 | $'000 | $'000 | $'000 | |
As at 1 July 2011 | 4,317 | 24,857 | 58,826 | (2,825) | (62,290) | 22,885 |
Proceeds from issue of shares | 4 | - | - | - | - | 4 |
Loss for the period | - | - | - | - | (289) | (289) |
Share options | - | - | - | - | 64 | 64 |
As at 31 December 2011 | 4,321 | 24,857 | 58,826 | (2,825) | (62,515) | 22,664 |
On 28 November 2011 the company issued and allotted 100,000 ordinary shares of 2 pence each following the exercise of options under the company's Enterprise Management Incentive Share Option Scheme. These shares were fully paid and satisfied in cash.
7. Circulation
A copy of this announcement is available from the Company Secretary, Pure Wafer plc, Central Business Park, Swansea Vale, Swansea, SA7 0AB. A copy is also available on the Company's website: www.purewafer.com.